19 Mar 2023
Ministry of Economy announces temporary hike in egg and poultry prices
Analytical study conducted in partnership with a specialized advisory team
The Ministry of Economy (MoE) approved a temporary hike in the prices of eggs and poultry products in the country by a maximum of 13 per cent, pursuant to the Ministerial Resolution No. 41 of 2023 issued on March 6, 2023. The move falls in line with the Ministry’s efforts to ensure the welfare of both merchants and consumers in a balanced manner, and to maintain food security in the country’s markets based on the provisions of Federal Law No. 15 of 2020 on consumer protection, and related laws and decisions. The Ministry clarified that the price hike is temporary, and will be assessed within six months from now to decide whether to continue, be canceled, or modified, based on developments in the local, regional and global markets.
The Ministry explained that the decision was adopted after a request was submitted by a number of companies operating in the sector citing that they had incurred significant losses over the last period due to high production costs and rising shipping costs, which reached record levels.
Subsequently, the Ministry conducted an analytical study to determine the market demand for these products in partnership with a specialized advisory team, which concluded that an increase in prices in the range of 13-20 per cent is justified. The study's findings were then submitted to the Supreme Committee for Consumer Protection comprised of all concerned parties at the federal and local levels. The committee then recommended a 13 per cent hike.
The Ministry added that the temporary hike in prices would contribute to protecting poultry and egg producers and farms from the adverse impact of high production costs by mitigating them. In addition, it ensures sustainability of these businesses and guarantees their ability to supply the country’s markets with these goods at stable and reasonable prices. They will also be able to meet consumer needs in all emirates of the country without declined activity or disruption in the supply chains.
The Ministry pointed out that a 13 per cent hike is fair and aligns with the prices of these products in regional and global markets. The proposition of a temporary hike was considered in light of the high prices of raw materials and the demands of eggs and poultry production such as fodder, fuel and vaccinations. Another major factor is the high international shipping prices, especially from Russian and Ukrainian ports that are considered the main global supplier of grains used in poultry feed. In addition, a wide array of developments witnessed by the global markets were considered, such as rising inflation levels and global supply chain challenges, volatile currency exchange, higher freight rates, and current geopolitical issues.
Furthermore, the Ministry emphasized that eggs and poultry products are among those products whose prices cannot be raised without obtaining prior approval. The matter falls within the Ministry’s jurisdiction and competence, and is in line with the recently launched pricing policy pursuant to the Cabinet Resolution No. 120 of 2022 on the Country's Consumer Goods Pricing Rules and Controls.
The Ministry of Economy underlined the need to acknowledge the rising prices as a global challenge and reiterated that it is constantly studying any global increase in the prices of basic goods, to efficiently work within a transparent policy to limit the impact of any uncontrolled increase in the global prices on the UAE’s market. It strives to mitigate the impact of these price hikes on consumers, protecting the interests of both the merchant and consumer in a balanced manner.